The United States Securities and Exchange Commission (SEC) has charged two brothers, Jonathan Adam and Tanner Adam, for allegedly orchestrating a $60 million cryptocurrency Ponzi scheme.
related reading：OmegaPro Co-Founder Arrested in Istanbul Over Alleged $4 Billion Ponzi Scheme
The brothers claimed their crypto trading bot could secure investors a 13.5% monthly return. They attracted over 80 individuals between January 2023 and June 2024.
Their story was that the bot identified and exploited price differences across crypto markets, using investor funds in a lending pool for flash loans and trades.
However, according to the SEC, this trading bot never existed.
related reading：Cryptocurrency hedge fund Jafia LLC ordered to pay $84 million for Ponzi scheme
SEC enforcement official Justin Jeffries points out that $53.9 million of the $61.5 million raised was misspent by the brothers.
Investors received some returns, but most of the money went towards luxury items, including vehicles and constructing a $30 million condo.
Jeffries describes the operation as fraudulent, noting that the brothers used investor funds for Ponzi-like payments and personal indulgences.
The brothers are accused of misusing most of their investors' money to fund their lavish lifestyles. Source: SEC
In addition to promising high returns, the brothers downplayed the risks involved.
Jonathan Adam is also accused of misrepresenting his background, failing to disclose prior securities fraud convictions to gain investors’ trust.
The SEC has moved swiftly, securing emergency asset freezes for the companies involved, GCZ Global, LLC, and Triten Financial Group LLC.
The agency is seeking permanent injunctions, forfeiture of the ill-gotten funds, and civil penalties against the brothers.
related reading：SEC Charges NovaTech Founders in $650 Million Crypto Ponzi Scheme
This case is part of a broader issue. In 2022, blockchain intelligence firm TRM Labs reported that $7.8 billion was funnelled into cryptocurrency pyramid and Ponzi schemes globally.
Despite the SEC's actions, the case highlights ongoing challenges in regulating the cryptocurrency sector, where fraudulent schemes continue to thrive.
OmegaPro co-founder Andreas Szakacs was arrested in Istanbul, accused of defrauding millions through a Ponzi scheme. The case underscores the global reach and impact of online scams.
BerniceGolden Finance launches the 2208th issue of the cryptocurrency and blockchain industry morning report "Golden Morning 8:00" to provide you with the latest and fastest digital currency and blockchain industry news.
JinseFinanceAfter a stellar year on track to earn $4.5 billion, the newly promoted Tether CEO is looking to diversify the company’s investments.
JinseFinanceThe event will host a variety of industry leaders and organisations, including Microsoft, Gate.io, Avalanche, TON, IslamicCoin, LBank, bitgrit, Horizon Protocol, Venus Protocol, HAQQ, among others.
Olive
Coinlive Coinlive 29 July 2022 - AAX, a crypto exchange for everyone, is delighted to announce its participation as a Featured Sponsor ...
BitcoinistThe Blockchain Economy Istanbul 2022 summit made one thing clear: The positivity of the crypto ecosystem remains unfazed by the turbulent market shakeouts.
CointelegraphBitcoin has been losing value for months because of, among other market variables, limited liquidity circumstances and targeted dumping of ...
BitcoinistThe official introduction of Cointelegraph France is taking place at the Paris Blockchain Week Summit, a flagship European blockchain event.
Cointelegraph